A Peek Inside Successful Lending Shops

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the latest Former CFPB Exec Attracts Criticism for Startup FHA Solvency Act Passes Through Senate Raj Date rolled out a mortgage company that is catching heat for its existence. T a na ly t ic s se r v ic i ng Or ig i nat ion SECONDARY MARKET s e c on da r y m a r k e t Raj Date S ince helping draft the final rule for a qualified mortgage, former Consumer Financial Protection Bureau (CFPB) Deputy Director Raj Date has resigned from the agency and opened his own advisory and investment firm aimed specifically at "those borrowers who do not meet the standards for qualified mortgages as set by the CFPB under rules." Other senior employees at CFPB have also left to join Date, including Gary Reeder, Chris Haspel, and Mitch Hochburg. This turn of events has raised questions as to the agency's ethics and integrity. "Simply put, it appears that former CFPB employees are now offering financial products in a market sector created by the very rules they were in a position to influence while working in senior leadership positions 58 | The M Report at the CFPB," stated a letter from House Financial Services Chairman Jeb Hensarling (R-Texas) and House Oversight and Government Reform Committee Chairman Darrell Issa (R-California) to CFPB Director Richard Cordray. Date reportedly left the CFPB to spend more time with his family at the end of January, one month after the announcement of the final rule for a qualified mortgage. Two months later, in March, he opened Fenway Summer LLC to assist borrowers who do not meet the requirements of a qualified mortgage. "Most lenders assert that, as a result of the CFPB's new qualified mortgage rule, they will no longer issue non-qualified mortgages" because of the high risk and costs involved in these loans, according to the representatives' letter. Fenway will fill this market gap created by the new rule. In their letter, the representatives requested communication between Date and others regarding the drafting of the qualified mortgage rule, any communication between CFPB employees regarding the creation of Fenway, and any communication between Fenway and the CFPB since Fenway's establishment. The representatives also reference similar concerns others have expressed, including a comment from Richard Painter, a former White House ethics officer, who called Fenway "an extortion racket," and said of its employees, "they'll call up their buddies in the agency to call off the dogs." The bill should strengthen the FHA's financial situation and protect taxpayers. he Federal Housing Administration (FHA) Solvency Act of 2013 (S. 1376) is headed to the Senate after receiving approval from the Committee on Banking, Housing, and Urban Affairs. The bill, unveiled by Chairman Tim Johnson (D-South Dakota) and Ranking Member Mike Crapo (R-Idaho), includes a number of bipartisan proposals from the committee intended to strengthen the FHA's financial situation, protect taxpayers, and ensure qualified borrowers still have access to credit. The bill passed by a vote of 21-1, according to a release from the committee's website. "This was a bipartisan effort from start to finish," Johnson said. "The reforms we approved . . . are the product of a lot of hard work from members on both sides of the aisle, and I appreciate the spirit of bipartisanship and open debate that my colleagues on the committee demonstrated throughout the amendment process." Business Slows Again at Fannie Mae Despite gains in profit, the GSE's book of business shrank. A fter rising in April and May, Fannie Mae's book of business contracted once more in June, according to the GSE's monthly volume summary. The latest summary shows Fannie Mae's book of business shrank at a compound rate of 1.9 percent in June, turning down from 0.3 percent and 0.2 percent gains in May and April (respectively). Yearto-date, the book's monthly average growth rate has come to -1 percent. As of the end of June, the book's value totaled $3.174 trillion, down from $3.179 trillion in May. New business acquisitions also slipped, coming to $72.6 billion compared to May's $78 billion and June 2012's $70.6 billion. Fannie Mae's gross mortgage portfolio continued to shrink, though not as quickly as in May, contracting at an annual rate of 18.4 percent. Through the first half of the year, the average monthly growth rate for the portfolio was -20.3 percent. The Conventional SingleFamily Serious Delinquency Rate was 2.77 percent in June, down 6 basis points. The Multifamily Serious Delinquency Rate was 0.28 percent, down 2 basis points. Fannie Mae completed 12,967 loan modifications in June, down from 13,650 in April. The company reported a total of 83,511 loan modifications in the first six months of 2013.

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